COHN RESIGNS — What you need to know in markets on Wednesday

Tuesday was a quiet day in markets. And then at 5:30 p.m. ET, The New York Times first reported that President Donald Trump’s chief economic adviser Gary Cohn would resign. Quiet no more.

Cohn had been seen as the leading voice against Trump’s current plan to implement tariffs on steel and aluminum imports and had been widely viewed by markets as the economic voice of reason inside the administration. Before Trump nominated Jay Powell as Fed chair, Cohn was seen as a potential successor to former Fed chair Janet Yellen.

Following news of Cohn’s departure, the dollar was lower and stock futures were getting hit with Dow futures losing as much as 290 points, or 1.1%, S&P 500 futures down 27 points, or 1%, and Nasdaq futures down 62 points, or 0.9% as of 6:05 p.m. ET.

Expect Cohn’s departure to be a major driver of the market action and conversation on Wednesday with his absence in the administration likely seen by markets as a sign that Trump’s proposed tariffs on aluminum and steel imports will be passed, with additional tariffs now a possibility.

During his time in the Trump administration, Cohn had often been seen as an outsider by many Trump loyalists and derided as a “globalist” by the far right of Trump’s base. Markets, however, saw Cohn’s continued presence in the administration as a positive.

Lloyd Blankfein, CEO of Goldman Sachs (GS) where Cohn served as President before joining the Trump administration, said in a tweet Tuesday evening that Cohn, “deserves credit for serving his country in a first class way. I’m sure I join many other who are disappointed to see him leave.” Shares of Goldman Sachs were down 1.7% in after hours trade on Tuesday along with the broader market.

Cohn very nearly left the administration back in August after Trump said “many sides” were to blame for deadly violence during a white nationalist rally in Charlottesville, Virginia.

In an interview with The Financial Times after Charlottesville, Cohn said, “I have come under enormous pressure both to resign and to remain in my current position. As a patriotic American, I am reluctant to leave my post as director of the National Economic Council because I feel a duty to fulfill my commitment to work on behalf of the American people. But I also feel compelled to voice my distress over the events of the last two weeks.”

For Cohn, it appears, tariffs were a bridge too far.

On the market

As for the market action on Tuesday, it was a quiet day but the averages still closed in the green across the board. The Dow gained just 9 points, or 0.04%, while the tech-heavy Nasdaq led gains with a 41 point, or 0.5%, advance while the S&P 50 added 7 points, or 0.2%. The 10-year yield moved higher on Tuesday to hit 2.88% after having touched 2.8% last week.

And after a broad lack of catalysts on Tuesday, on Wednesday, investors will have a busier economic schedule headlined by the ADP’s release of private payroll growth in February set for release at 8:15 a.m. ET. Expectations are 200,000 private jobs were created in February and this report comes ahead of the government’s official numbers due out on Friday.

Also on the economic schedule will be a reading on consumer credit balances and the latest Beige Book from the Federal Reserve.